Three women from Texas have been charged with federal violations related to a mortgage fraud scheme in the Eastern District of Texas, according to an announcement by U.S. Attorney Damien M. Diggs.
Nicole Espinosa, known as the "Short Sale Queen," aged 35 from Plano; Stephanie Smith, also known as Stephanie Parks, aged 44 from Midlothian; and Selena Baltazar-Hill, aged 28 from Dallas, were indicted by a federal grand jury on November 20, 2024. They face charges of conspiracy to commit wire fraud affecting a financial institution and conspiracy to submit false statements to a federally insured financial institution. The defendants have been arrested and are scheduled for a court appearance before U.S. Magistrate Judge Aileen Goldman Durrett on December 4, 2024.
Court information reveals that since 2017, Espinosa, Smith, and Baltazar allegedly operated a mortgage fraud scheme through various companies including Short Sale Queen, L.L.C. They reportedly targeted properties in pre-foreclosure short sale processes and engaged homeowners in listing agreements. Subsequently, they submitted fraudulent documents to financial institutions to freeze or halt foreclosure proceedings. These documents included falsified purchase agreements and altered proof of funds letters from supposed buyers. As a result of these actions, financial institutions unknowingly paused foreclosure processes and waived fees while the defendants sought real buyers or canceled deals when legitimate buyers could not be found.
The indictment alleges that fraudulent documents were submitted for at least 88 properties totaling over $8 million in sales. The defendants reportedly obtained at least $390,000 in commissions and processing fees while causing approximately $2.5 million in losses to financial institutions.
If convicted, each defendant faces up to 30 years in federal prison.
The case is under investigation by the Department of Housing and Urban Development, Federal Housing Finance Agency, and Department of Veterans Affairs. Assistant U.S. Attorney Anand Varadarajan is prosecuting the case.
It is important to note that a federal indictment is not evidence of guilt; all defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.